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Monday, April 30, 2012

No Won in Your Wallet

Dear Korean,

Do wealthy Koreans carry something in their wallets other than won notes? In many K-dramas I've watched, someone--usually a rich someone--will offer payment that looks like a sort of check or money order. The recipient will often say, "Ah..that's too much!" Any idea what these slips of paper are?

Pretty good eyes to recognize that the slip of paper is probably a check or a money order. This is called 자기앞수표 in Korean, or "banker's check." It is essentially a pre-printed check that entitles the holder of the check to the amount listed on the check. (Usually KRW 100,000, but the amount can be KRW 1 million or 10 million.)

It is important to note that this is not cash -- it is a commercial paper that may be exchanged into cash, but not itself cash. Although it is sometimes used like cash, many places of business would refuse to take banker's check as a form of payment. (For example, more often than not, you would not be able to use the banker's check to pay for your meal at a restaurant.)

Then why do people carry this piece of paper around? Answer: until June 2009, the highest denomination in won notes was KRW 10,000, or a little less than $10. One of the side effects of Korea's miraculous economic growth since the 1960s meant that people began to exchange larger and larger values very quickly. By 1990s, much like Americans, many Koreans would carry around $100 to $200 (i.e. KRW 100,000 to 200,000) in their wallets, and it was a significant hassle to carry 10 to 20 sheets of the KRW 10,000 notes in one's wallet.

The use of banker's check decreased after the introduction of the KRW 50,000 note in 2009, but until then, it was a common sight for the KRW 100,000 banker's check to get whipped out, usually with the same gusto that an American might pull out a $100 bill.

Got a question or a comment for the Korean? Email away at askakorean@gmail.com.

11 comments:

I thought this was going to be about not using cash. As an ardent opponent of cash in all its forms, one of my favourite things about living in Korea is that it makes it very easy to never use cash. I sometimes go 2-3 weeks without withdrawing cash from an ATM, and I withdraw 100,000 won at a time.

When I was younger, I wondered why they didn't make denominations larger than 10,000 KRW. Then I saw a news story on television about the latest slush fund/money laundering bust and saw an apartment with a giant block of 10m x 10m x 1m block of 10,000 KRW notes, and I understood.

Aah, a cashier's check then. Do you have to designate who it goes to and sign as you would with a regular check? What if your wallet gets stolen -- does that mean that the checks you had in there can be cashed as they are?

Yani, you don't have to designate who it goes to, but you do have to sign the back and put your phone number on it, though no one has ever checked me to see if the phone number was true. For a long time, probably because I'm a foreigner, I had to provide my passport number also, but that doesn't happen much anymore, for whatever reason. I'm guessing if you tried to use one that was stolen, you would be found out. Maybe.

What TK says about using supios in a restaurant used to be true, no doubt, but these days the only conflict is if they have enough cash in the register to give you your change comfortably. The person being paid has the option to accept them or ask for legal tender instead. On many occasions, I have used a supio to buy a single pack of cigarettes, for instance.

More often than not, you CAN use them to pay your bill in a restaurant, and a lot of ATMs give you the choice of receiving cash or check.

I have another question about Korean money... I notice that a lot of times in Korean dramas things are paid for in coins -- things like a bowl of ramen, or a soda from a vending machine. I often wondered if they were literally using coins (like the equivalent of .25 or .75 USD), or is it that the coins they are using are like dollars (similar to the British pound).

I suppose I could ask my cousin since she's Korean and literally down the hall from me right now, but I'm curious to hear your answer! :P

I travel to Korea often and I've found in more recent years the supyo's are readily taken. Still, they do ask you for a phone number or like your Joomin number (identification) to write on the back. I was at a big chain makeup store in Myungdong and they still asked. However, I think it just depends where and like thebobster was saying, it just depends on the local store if they'll take it or not, usually depending on if they have enough change to hand out.

For the coins, they do have coins in denominations of 5, 10, 50, 100, and 500. and they are used like the equivalent of USD just in Wons.For example, two 500 coins equals the same as 1000won bill.

However, most people do not carry the smaller amount of coins around usually just the 100 and 500 as prices are nicely rounded out. 100 are usually used for coffee machines, getting the cart from the grocery store, etc

It's easy enough to spend KRW 100,000 or close to it at restaurants these days, so for people who love paper money, I guess the 수표 still makes sense. The clerks can use the same machine they use to swipe credit cards to check the authenticity of a 수표. I honestly find them to be inconvenient compared to using a credit or debit card and with the KRW 50,000 note, there's not much point unless you're buying something huge like a car and get KRW 1,000,000 or 10,000,000 수표들 printed.

As for Esther's question about coins, currently in circulation there are 10, 50, 100 and 500 won coins. If you want to buy a cheap KRW 5,000 lunch using coins, you still had better carry a big purse. The KRW 500 coins are larger than quarters, so they get heavy fast.

The Korean Banker's Check is pretty much similar to the use of Domestic Traveller's Check in the past, only it does not have any personalized feature, meaning ANYONE can use it. It is pretty much currency, only printed by individual banks instead of the Central Bank, just like the pre-Federal Reserve US Dollar banknotes.

The 50000 Won banknote seems to be just a feminist propaganda ("Let us put a woman's picture on a banknote"), they might as well put Pangya's Arin on the cover. There is not much use of it, especially in the days of quick bank transfers and also paying high value items in the realm of millions; plus the usual lowest Banker's Check is already 100000 Won. A 250000 Won banknote seems to be preferable than a 50000 one.

The 10000 banknote limit does put both a physical and psychological limit on how much money regular people regulary traded each day. Humans have no limit though, the Korean banks circumvented this limit by issuing anonymous checks.

The past Korean 10000 banknote limit seems to be the connected to the Japanese 10000 banknote limit, with the current rough exchange of 10 Won for each 1 Yen. Despite on what the mass media regulary promoted, the Japanese and the Koreans seem to be quite close to each other, at least on the actual organisations that actually controlled both countries (the 'Honne'). The current official Japanese and Korean goverments are quite weak puppet governments (the 'Tatemae'), but then again the same can be said to many official governments around the world.

Despite on what being regulary told to the public,'crime prevention' does NOT seem to be the main motive for the 10000 limit. People doing things designated as crimes by the State usually use other forms of payment, such as high value items (e.g. gold) and easily transferred credits (e.g. online game vouchers). Also money laundry services are usually done through other means, such as casinos and arcades ("Filming inside the Casino/Arcade is prohibited"); plus also stuff like books, movies, TV series, games, videos, etc. Banknotes are not really the prefered way to store and transfer huge amount of value, both in the past and the present.

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About TK

The Korean is a Korean American living in Washington D.C. / Northern Virginia. He lived in Seoul until he was 16, then moved to Los Angeles area. The Korean refers to himself in the third person because he thinks it sounds cool.